Gold Hovers Near 3-month High

2/24/2012 7:14 AM ET

The price of gold was hovering near its three-month high Friday morning amid a generally weak U.S. dollar.

Gold for April delivery, the most actively traded contract, eased $4.70 to $1,781.60 an ounce. Yesterday, gold extended gains for a third session mostly on a weak dollar and waning optimism for the Greek bailout deal.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 1,282.80 tons from 1,281.59 tons.

This morning, the U.S. dollar was lingering around a 2-month low versus the euro and extending losses for a second session against sterling. The buck was extending its 3-month low against the Swiss franc, while extending its its 7-month high versus the yen.

In economic news from the euro zone, the German economy contacted 0.2 percent quarter-on-quarter in the fourth quarter, according to an updated estimate from the Federal Statistical Office. The year-on-year growth rate of 1.5 percent was also confirmed by the report. The 2011 growth rate of 3 percent was unchanged from the preliminary estimate.

Elsewhere, the U.K. economy contracted in the fourth quarter for the first time in a year, in line with previous estimate, second estimate released by the Office for National Statistics showed. Gross domestic product dropped 0.2 percent sequentially in the fourth quarter, as initially estimated. Meanwhile, the third quarter growth was revised down to 0.5 percent from 0.6 percent.

The prices of silver and platinum were trading flat in morning deals.

From the U.S., the Reuters and the University of Michigan's final report on the consumer sentiment index for February will be released at 9:55 a.m. ET. The consumer sentiment index is expected to be upwardly revised to 73 from the mid-month reading of 72.5.

A little later, the Commerce Department is due to release its new home sales report for January. The consensus estimate calls for new homes sales of 315,000 following a reading of 307,000 for December.